Financial Thoughts

Rising prices everywhere coupled with stagnant salaries creates an atmosphere that demands action on the part of the consumers. Cutting back on luxuries is, of course, always an option; that is, until you run out of luxuries. Soon you arrive at the basics and these are much more difficult to trim. A solution to this dilemma would be to supplement your income.

Most people have many more possessions than they will ever need. It may be time to start weeding through your closets and storage areas to recycle all of the unused items. Price items to sell by checking auctions and comparing prices in consignment stores. Kids clothes are easy to gather up for sale and a popular item to by used. Then determine where your items would fit best and get the highest price for your merchandise. Consider posting them on Ebay. You determine what will work best for your belongings and begin to sell them. Save all of this income, if possible, and use towards an emergency fund for the future.

Another possibility to increase your income would be to exploit any particular knowledge or talent you may have. If you have a strong background in a particular subject, you could try tutoring. If you are into physical fitness, get certified and become a personal trainer. If you charge less than other trainers, you should be able to build a regular clientele.

If you have an extra room at home, consider renting it to supplement your income. If you have an unused garage, this could also be leased to someone who doesn’t have one or needs an extra. If you live in a tourist area, consider visiting family while renting your home or apartment for a few weekends.

Neighbors are always looking for people to assist with tasks such as house sitters, dog walkers, or yard work. Any of these could provide additional income and help you to meet the challenges of today’s economy.

Every household has to begin to budget their finances in these tough times. We are all being squeezed by the price of gasoline, the large increase in the food prices, and everything else that is increasing faster than we can imagine. The only thing which is not increasing is the average worker’s paycheck. With these thoughts in mind, it is time to analyze the family budget and try to plan for a regular savings program.

There is a specific breakdown for the family budget. The first objective is to set aside 5% of your income for savings. If this is not possible, reduce the percentage but do not ignore savings. It is an important part of your budget and must become a routine in your financial planning. This should always come first. The next item to be factored into the budget is a maximum of 25 % of your net income for mortgage or rent expense. Food should account for 20 % of your budget and 10% should be allowed for energy costs. A 15% maximum should be applied to personal credit debt, leaving 25% of your budget for other necessary items. This will include your health insurance and medical costs. It would be wise to use any leftovers as additional savings or to pay towards credit card debt.

Savings usually equates with sacrifice and there are many areas where each of us could give up something we enjoy in order to save money. One of these areas might be the daily visit to a coffee shop. Purchasing these coffees is very expensive and, in these days, a luxury item. Restaurant visits must be curtailed while a bagged lunch and dinner at home will be the obvious replacements. Never shop for groceries more than once a week and be sure to consider store brands as replacements for brand-name items. Coupons are another source of savings that should not be ignored.

It will take a carefully prepared budget to show a family where expenses can be cut. Once you have recognized where there exists opportunities for savings, you are on the road to preparing a realistic budget that can work for your family.

Many of us are required to use our personal automobiles for job-related travel. We may be attending a meeting away from the office, visiting a client, or simply running errands necessary for the smooth operation of the business. All of these trips would make an employee eligible for mileage reimbursement. The amount of money paid to you by your employer for each mile traveled has always been determined by the Internal Revenue Service. This amount is generally adjusted each year and widely published so that all companies reimburse their employees at the same rate.

This year the IRS has chosen to increase the reimbursable amount effective July 1, 2008. I’m sure that this is a direct response to the extremely large change in the gasoline price per gallon, which the citizens of this country have been absorbing in the first six months of this year. The IRS has raised the automobile mileage rate for businesses and others from 50.5 cents per mile to 58.5 cents effective July 1, 2008. In addition to businesses, this rate applies to those who use their automobiles for charitable, medical or moving purposes.

If you drive for your employer and are eligible for auto expense reimbursement, be certain to keep detailed records as to your mileage and to submit them for repayment on a regular and timely basis.

There is a new local business in my community called Stress-Free Money Management. This is apparently a business that manages money for people. According to their advertisements and local newspaper articles written about their business, they service individuals, families, and small business owners. One of their marketing strategies is to tie their service into saving money on marriage counseling, playing on the fact that the #1 things married couples argue about is money– clever marketing! They provide assistance with their ordinary paperwork. They pay bills, balance checkbooks, and assist in maintaining financial records. They also keep track of tax documents and develop plans for spending.

This new organization provides their services to older adults, small business owners and professionals. This company represents that they can assist older adults in maintaining independence. Small business owners are very busy, so this group takes over their daily management of business finances. This company states that they are qualified to assist many groups of people handle their daily money management needs. However, although the owner claims to have a background in banking, there are no specifics as to his qualifications or the educational background of the employees who will be servicing the individual customers. I would certainly reserve judgment on a company such as this and wait and see how successful they become. I would like to hear their clients sing their praises before I signed up for any of their services. Turning your money over to someone is a very large step and should be taken with the utmost of caution.

There is also no mention whatsoever as to the fees that are being charged for these services. Frequently, all of these services will be legitimately provided; however, the fees can range from very costly to astronomical. I would want a very accurate estimate of the fees before I considered retaining these services. Also, when it comes to elderly family members, we must be even more cautious as to who is handling their funds.

As with most new services, it is always best to take a wait and see attitude. Allow others to go forward with these new services, listen to the comments and satisfaction rates, and then decide whether this is a service that can benefit you, your business, or your family.

As though consumers were not having a difficult enough time stretching their budgets, something new has been happening that will make it even more difficult for them. Customers who pay for gasoline with their debit cards are beginning to notice some problems with their accounts. Apparently, a number of gas stations have changed how they process your debit payment and it can affect you in several ways.

Ordinarily, when a customer uses a debit card to pay for gasoline, a “hold” of $1.00 was put on the account. This verifies that the account exists and the actual amount is charged to the cardholder either at the end of the business day or on the next day. Payments have been processed in this manner for some time. Now, however, with the cost of gasoline rising so rapidly, gas station owners are becoming concerned that the customer may not have a sufficient balance for him to collect payment from their account. To combat this fear, station owners have begun placing “holds” on accounts in the amount of $75 or $90. These holds can remain on the account for several hours or a few days. It is even possible for the $90 “hold” to continue on your account after the actual purchase amount has already been deducted.

If you purchase $25.00 worth of gas but the “hold” on your account is for $90 and lasts, for example, two days, this may cause checks issued to others to bounce. It can result in your being denied a withdrawal from your account for “insufficient funds”. It also has the potential to activate the “overdraft account” banks like to offer you for free. They are free, of course, only until you use them. Once initiated, they have extremely high fees attached. Most consumers are not aware of the procedure of holding funds, so they will not anticipate a problem if too much money is placed on “hold”. The easiest way to successfully avoid any problems with this procedure is to keep extra funds in your account on a regular basis. With finances getting tighter everyday, this is becoming increasingly more difficult to do. Another option for avoiding this problem is to present your card to an employee of the station and have it processed by using your pin number. This will assure that only the exact amount of your purchase will be charged to your account.

We all know that banks are in trouble as a direct result of extending loans to people who couldn’t afford to repay them. When property values began rapidly decreasing it became obvious that the banks had a big problem. Many homes were worth less money than the existing mortgage and people began just walking away from them. Although this is an irresponsible move, it has been done often. Other people lost their jobs and were unable to continue making mortgage payments. Some were able to negotiate new terms with their lenders, skip some payments, and extend the loan period. All of these can help a person stay in their home and eventually get their finances back in shape. This, however, requires that the lender works with you. Some are very cooperative as they do not want to own your home, especially today, when the market is so poor and prices are continuing to fall. Others are not as amenable to changing the agreed-upon terms.

In an effort to shore up their financial situations, some banks have begun freezing Home Equity Lines of Credit (HELOC). This can have a great effect on the consumer who is depending on this line to meet a variety of expenses. Some borrow against their home to finance a college education. Others might be in the middle of a major home improvement when they discover their line has been frozen. How do they complete the work that is being done and pay the contractor? Borrowers applied for these lines of credit because they had plans for the money. These plans have now been disrupted.

Apparently, the banks are freezing these credit lines in areas where home values have decreased the most. It is not necessarily a reflection of the homeowner’s credit rating or payment history with the bank. Although the banks insist that they are sending letters to customers about freezing these credit lines, a number of people have stated that they did not receive a notice. These people often find out about the freeze after they have withdrawn funds and had their checks bounce. They are now incurring fees in addition to having to find another source for payment of debts. This situation is causing numerous problems for the customers who depended on their banks to honor their commitment for these lines of credit.

The price of gas is discussed in the newspapers and on the news programs almost daily. It is the major topic of the day as it is causing so many problems for the economy and the family budget. It is definitely time to start driving sensibly so that you can use less gas and save some money. Here are some surefire ways to get more miles per gallon.

Speed control is something everyone should be doing today. Set your cruise control to a few miles per hour less than normal and enjoy the ride. Remember, if you keep your speed at 60 or below, you will get much better has mileage.

Consider removing heavy items from the trunk as a way to fight back against high gas prices. A lighter automobile will help you maintain the mileage you want.

Observing speed limits and eliminating too many stops and starts can also have a large impact on the amount of fuel used.

Avoid long lines at drive-ins. Park the car and go inside. Idling has a negative effect on mileage so turn off the engine if you are stuck somewhere for a long period of time.

Better yet, shop online. You can get just about anything online now, from household items, to groceries, to business gifts for clients, christmas shopping, office supplies.  You will save money usually, the prices are more competitive, especially for larger purchases; you can find cheap laptops by surfing the net instead of driving around trying to compare features. At minimum, shop around online first, saving gas. Shop for health insurance quotes, shop for an accountant, shop in advance online and save time and gas.

It stands to reason that keeping your car in good shape will help you save. It is important that the engine is tuned properly, spark plugs are clean and all tires are properly aligned.

Be certain to use the motor oil recommended by the manufacturer and keep tires inflated properly.

While driving on the highway in summer it actually can be beneficial to use the air conditioner rather than opening the windows. The reverse is true when doing errands locally.

Avoid heavy accessories like luggage racks. If you have body dents in the front of the car have them repaired as the body needs to be straight to assist in your quest for the best mileage possible.

Good planning will also help you save on fuel. Always map out where you are going and be certain to do all errands at one time. Also, consider the time of day so you will not be stuck in traffic.

If we follow this advice, we will all benefit. Driving sensibly can save both money and gasoline.

It is definitely time for all of us to look around our homes for ways to save money. Of course we are all focused on groceries and gasoline right now, but energy savings could also result in improving our family finances.

Begin your home review by taking the time to carefully examine your family’s habits. Are lights being left on unnecessarily? Are all of you guilty of this wastefulness? If so, maybe it’s time to have a family meeting and enlist the help of everyone towards saving energy which will, in turn, lead to saving money.

Hold a discussion about lights. Explain that you are going to replace incandescent light bulbs with the new compact fluorescent ones that last longer and use much less energy. Be sure everyone turns off the lights when they are not needed. Also, televisions must be turned off before you leave the room. Consider hanging signs if the family is continuing to be forgetful. This is just sound parenting, developing good habits for life. Appeal to your children’s desire to save the environment as many are focused on that today and this could be their small contribution. New habits are hard to form but these will be very worthwhile in the long run.

It is worthwhile to unplug items which draw power even when turned off. Especially concentrate on doing this when you and the family will be gone for the day, or when leaving for vacation. This is just one more opportunity for savings. The items that should be unplugged include televisions, computers and microwaves.

Consider installing ceiling fans to create air circulation thereby allowing you to raise the temperature in your home. Automatic timers will help you save on heating and cooling when you are away from home and yet still provide comfort when you and your family return.

Caulking and weather stripping can seal your home more efficiently and provide a big savings in both heating and air conditioning costs. Since the windows allow most of the heat into your home, consider heavy shades or insulated draperies. Another alternative would be to plant trees strategically so they will shade the most vulnerable areas of the house.

While conducting your energy audit, remember to replace air conditioning filters monthly, as a dirty filter blocks air flow and causes the air conditioning system to use more energy. This is a very inexpensive way to conserve.

Share your energy bills with your family in the future. A good idea might be to make a chart showing the savings after initiating all of these changes. Record the energy use over the past year and, each month, post this year’s equivalent use. Show the family how their efforts are improving the family budget while also saving energy.

Credit card companies are targeting young people as their newest customers. They have displays at schools, offers in student literature and mail applications to their homes on a regular basis. One student recently told me that he has received at least one credit card offer per week since he was in high school and he has now graduated college. He states that he just throws them away unopened as he has no interest in having a credit card. He knew that while in school it would be entirely too tempting to have the availability to purchase everything you wanted and to go out to dinner more often then you could actually afford. He learned a lesson from watching many of his friends pile on debt. Unfortunately, not all students have such a mature attitude and many fall into the credit card trap.

It is understandable that when you attend college and are out on your own for the first time, you have no financial background to fall back on. The most you may have done to date is manage your allowance but that was probably frequently just fun money. You didn’t have to pay every little expense like doing laundry, buying food, purchasing supplies, etc. Although most parents supply some financial support to their college students, many do have to work and contribute towards their expenses. A majority handle this responsibility very well. Some even manage their credit cards properly and pay off balances in full each month. Unfortunately, though, there are many others who do not. These students are tempted by all of the offers they receive and eventually run up debt that they are unable to pay. They then take out another card to pay off the one that’s already in trouble. This is a very serious cycle for these young people as some of them are still paying off their credit card debts years later. They got to spend freely and live extremely well for a time, but the price for them is very high.  Some parenting advice is to encourage your child to obtain their first credit card, but to help them monitor the way it is managed, staying involved.

Even though the students generally have only a small income, or none at all, when the cards are issued, the credit card companies want their business. These companies know that the students are getting an education and chances are excellent that they will have good positions when they begin their careers after graduation. Meanwhile, the companies are solidifying their position with the students and betting that it will pay off in the long run, making them customers for life. If the student is not handling the credit responsibly, the company is charging them all of those extremely high fees for late payments and being over your credit limit. This is adding to their profit margins immediately and they are still confident that this customer will pay off his balance in the future, either with, or without, the help of parents.

Many people are greatly affected by the cost of gasoline to travel to and from their jobs. Commuting to work is extremely expensive these days and quite a few people are saying they cannot afford the additional expense. Some of these employees are requesting reduced working hours at the office and the opportunity to work from home for a specific period of time.

Escalating gas prices are encouraging businesses to consider the advantages of having employees work from their homes. Companies are hesitant to allow this but have seen that it can work to their advantage. This is an example of corporate understanding the needs of their employees and trying to meet their requirements. Many companies are responding to the gasoline crisis by adjusting their hours. Savings on gasoline is very important to people living on a very tight income. Additional costs are not easily absorbed and result in cutting costs in another area. This could result in lower food allowances, lowering the temperature in the house or driving less to save on gasoline costs.

Many government agencies and corporate giants are considering moving to the four day work week. This would save commuting costs but would also allow employees to have additional family time. This would greatly increase morale and allow flexibility where none previously existed. People who are able to share their time between their family and jobs are much happier employees. A happy employee benefits the company and provides the teamwork that all leadership is currently requesting.

Government agencies are currently asking their employees to consider arranging their schedules so they can work four days per week. This eliminates the gas usage for the additional day and also cuts back on the air conditioning in the building, telephone usage, etc. Employees could still process work from home but would not require the electric, phone usage, etc. that is currently used in the office environment. After moving employees home for work, these departments recoup some additional money through government asset recovery, selling off the office assets such as desktop computers, copiers, telephones. They provide the employees with practical equipment like Dell laptops as replacements.

A four-day work week gives an employee a great deal of flexibility. It is a wonderful opportunity, especially for young mothers, as it gives them the flexibility to be true to both their family obligations and their professional responsibilities.

The current gasoline crisis may result in a new opportunity for women to work from their homes while still having the time available to see to the needs of their children. This would be a great outcome of a serious situation.

In today’s economy where bankruptcy filings have increased by huge percentages, lenders are being extremely cautious before committing to mortgage loans. Credit checks are becoming much more thorough than they have been in the past. The main concern is to determine how likely you are to repay your debt on time. The answer to this question is generally found in your credit score.

A credit score gives financial institutions a good idea of your credit history. They translate this to show them how you will handle debt in the future.

Your FICO score is the most important indication of your payment history. Although each credit reporting agency provides a score, the average of the three is generally what is used to determine your credit worthiness.

There are several things you can do to improve your credit score. You should consider the following in order to have the maximum credit score you can obtain:

Be certain that all bills are paid on time. Timely bill payment translates to 35 percent of the total score.

You should limit the number of inquiries on your credit report. If you are shopping for loans, do it all at once and they will read this as one inquiry for credit rather than a continuous shopping spree.

Available credit should be used in small portions.

Contrary to what is often said, do not cancel old credit cards. Available credit and the longevity of accounts can account for 15 per cent of your FICO score.

Credit counseling can have a negative effect on your score. It is not always so, but it can possibly prevent you from receiving the best rate available.

Having a good credit score can often make the difference between obtaining a good rate or an extremely high one. It can, sometimes, result in not obtaining the loan at all. Your credit score is extremely important so you must review it frequently and ascertain that all information contained therein is accurate and up-to-date.

I have often purchased gift cards for people. Whether it is a birthday, anniversary, wedding or holiday gift, it often seems like the right thing to do. I even use them for clients for business gifts. It is hard to decide what someone else would want or need. If you don’t know the person particularly well, it is even more difficult. I am currently in the process of purchasing a gift card for a good friend who has decided to relocate to Florida. A group of us are attending a party and presenting them with a gift card along with our good wishes for a wonderful future while they are following their dream. We wish them well. The last thing they need is for each one of us to purchase a small gift that they will have to pack and ship. It is, of course, our hope that they will use the gift card to purchase something memorable. I would like them to think of their friends in Virginia whenever they look at the item of their choice.

You need to be very careful when purchasing a gift card. Some have expiration dates and others have annual fees. I find this hard to believe but have heard many horror stories of people who have had their gift cards greatly reduced in value. Others have attempted to use their cards only to find out they have expired. These practices are unacceptable and anyone purchasing a gift card must investigate the product so that their recipient does not suffer this loss. In the case of business gifts, it can have the opposite affect of the intended result, leaving a bad taste in the client’s mouth associated with your company!

Gift card sales are one of the biggest moneymakers for stores. It is estimated that $8 billion is outstanding in gift cards. People forget they ever received the cards, stored them away in drawers, etc. and have paid no attention to them. I know I once received a gift card for a store that was not even located in the state in which I lived. I tried using it online but was told that this was not an option. I had to go directly to the retail store. It is policies such as these that discourage the use of the gift cards and the merchants get to enjoy the money which has never been spent.
There are other options with gift cards. They can be sold online and you can probably expect to get approximately 60 to 80 percent of their face value. Another alternative is that for a small fee, you can trade a gift card to a specific store for a card to another store, one in which you would like to shop. This is a great idea and can be accomplished by visiting several websites currently available for gift card swapping.

Everyone today is discussing the price of gasoline and how rapidly it is rising.  People are canceling trips and consolidating errands so they can drive less and save some of their money to put towards other expenses.  It is sad that many people have found it necessary to cancel their vacation plans this year because the cost of driving is probative and the cost of flying is rising just as quickly.  The only options left for those who are struggling financially is to stay close to home and visit whatever interesting sights and beaches might be in their local area.

For those people who are determined to take a vacation there are a few ways that they can cut down a little on their fuel costs.  It will take some effort on their part but may help save them some money that they will then have available to a few treats during the vacation.

Tests have shown that an SUV with a roof carrier carrying a suitcase and cooler can drop their miles per gallon from 27 to 21 while driving approximately 65 mph.  This is a very large increase in gas usage and avoiding it can provide a substantial savings, especially on a long trip.

Bringing your laptop on vacation can help lower your gas expense.  While you are traveling in unfamiliar territory, how can you know where the cheapest gas stations are located?  You can check the many websites that list local gas prices and should be able to save on each purchase.  This, too, could help provide you with a little extra spending cash.

By driving at approximately 60 mph for your entire trip you will be able to cut your gasoline usage.  Traveling at a rate of  8 mph over the speed limit will result in a lower miles per gallon figure and will cost additional money at the pump. The Automobile Association of America had tested gas mileage and found that it decreases rapidly over 60 mph.  Every additional 5 miles added to your speed is the equivalent of paying an additional 15 cents per gallon of gas.  The use of cruise control on highway trips will usually help you maintain a specific speed and result in saving gas.

If you believe you have worked hard all year and earned the vacation you are planning, then you should go ahead and have a relaxing trip.  It is important to remember, however, that you do want to spend your money wisely so following some of these gas saving tips may actually help make your vacation more enjoyable.

The price of gas today is the number one subject being discussed by everyone.  Complete strangers will comment to you about this outrageous expense.  I feel perfectly free to respond with my own experiences regarding this subject.  It’s really amazing how everyone is focused on this unbelievable cost of gas which keeps rising.

One of the reasons we are so obsessed about the cost of gasoline is that it also affects the cost of many of the other necessities of life such as food and clothing.  Anything that has to be shipped will see prices rise to cover this cost.  The average person is not just paying more for gas but is also absorbing the transportation costs of food, etc.  Meanwhile, salaries are stagnant and the only way to stretch the budget is to cut down on expenses.

Consumers are frequently being offered gas reward credit cards today.  This sounds like a wonderful way to get some of the money we are spending on gasoline returned to our pockets.  It does work this way sometimes, but everyone must be extremely careful about which cards they sign up for as there are many gimmicks awaiting consumers in this area.

Certain cards offer a 5% rebate on all gasoline purchases.  This is a wonderful way to recoup some of the additional expense we are trying to absorb.  Other cards, however, can be exceptionally misleading and as an applicant you must be very diligent in reading the fine print and being certain that this is the right card for you.

A person can only benefit from a gas rebate card if they pay their balance in full.  These cards tend to charge a very high interest rate and you will lose rather than gain money if you cannot afford to pay in full each month.

When calculating the value of a gas rebate card, it is important that you know how much gas you use in a specific period of time.

Some cards actually limit the rebate amount you may receive each year to $60.  Other cards require you use a certain gas station chain.  Still others necessitate that you request your rebates in writing.  If you do not contact them within a certain period of time your rebate will progressively shrink.

Obviously, no one wants to have a card that will rebate a small amount of money or none at all.  This is why it is imperative that a complete investigation is done prior to accepting a gasoline rebate card.  Everyone is trying to get them these days, and scam artists are trying to profit from your anxiety.  Read between the lines and all of the fine print.  It will save you money in the long run.

The economy is in or near a recession (depending on who you ask) so this would be the worst time for anyone to find himself or herself drowning in debt. In these tenuous times, credit becomes very difficult to obtain and cash is the payment of choice. There are many indications to let you know if you are in trouble financially and these are just a few. If you feel you might be in danger, check this list so you can begin to address the issue as soon as possible.

You make minimum payments on your current credit cards. If you are not paying down the balance, you will never be free of this debt.

Each month the balances on your cards increase. This is a definite signal that you are headed in the wrong direction and need to seek help.

If you and your spouse argue about money, it has already become a major issue in your lives and will lead to future marriage problems. You need to discuss the situation, agree on a plan of attack, and work together to restore your credit.

If you now charge purchases that you used to buy with cash, this is another sign that you are seriously in debt and need to begin addressing the issue.

If several of your cards are nearing their credit limit, things have become serious. Do not begin applying for additional cards at this time.

One of the surest signs that a person is drowning in debt is when they take cash advances from one card to make payments on another. This is an act of desperation and extremely expensive in the long run. Cash advances charge an exorbitant rate of interest and you are probably digging a whole from which you will never escape. The only route available to you under these circumstances will probably be bankruptcy filing.

There are many ways to begin paying off your debt but it takes a great deal of self-discipline and determination. You must be ready to live on a very tight budget and make many sacrifices to achieve this goal. It will also take the cooperation of your spouse and family, so it must be a joint decision.

There are counselors available to help you, courses are frequently given on how to become debt-free, and there are many groups of Debtor’s Anonymous available to provide counseling and group support. It’s amazing how driven you can become when you have someone to report all of your successes to and, occasionally, even the few failures that we all face. It is wonderful to have this type of support from people who have been down this same road. It can be a great help and might well be the catalyst that makes you successful in reaching your goal.

Today there are approximately 4 million Social Security recipients who are still receiving paper checks. These checks have the potential of being lost in the mail and are often received much later than anticipated.  Since these people do not maintain checking accounts, they often must travel to a check cashing facility and this is often difficult for the elderly.  They are then charged a fee for the convenience of having the checks cashed and these fees can vary greatly.
The U.S. Government has started a pilot program in four states in which they are offering debit cards to these people in lieu of the current checks.  The cards would be loaded with new funds each month and the money would be received on a specific day.  When someone chooses to sign-up for this debit card program, they will receive a Master Card debit card secured by a personal identification number (PIN).  These recipients will be able to use their cards to withdraw cash at ATM’s and they may also be used at retailers for purchases and to get cash back.

The senior citizens being issued these cards must be aware of a few dangers of using them.  For one thing, there are fees attached to the usage of the card.  The first ATM withdrawal will be free.  There is a 90 cent charge for each additional withdrawal plus some ATM’s will also charge an additional usage fee against the account.  There are specific charges for paper account statements and on-line bill paying services.

It is extremely important that those choosing to use this debit card keep accurate records regarding their spending and fees.  It is sometimes difficult to record transactions when you are making them and it is very easy to forget to enter one into your register.

Another very important thing to remember about these debit cards is that, if lost or stolen, they must be reported very quickly as the cardholder’s liability is linked to length of time that passes before they report the card missing.

Assuming the trial program goes well in the early part of this summer, the government anticipates being able to offer these debit cards nationwide by the end of the summer.  This could be a great convenience for the people currently receiving paper checks from Social Security, however, it also has the potential to cost them a great deal of money.  It is imperative that they use the card wisely and keep accurate records if this is to be a successful transition.   A small pilot program was previously offered in only one state and resulted in a very high satisfaction rate among those polled.

Economic times are tough and everyone is dealing with the high rate of inflation in their own way.  Many are driving less and consolidating the trips they do take.  Others are finding ways to cut their food expenses and rethinking what they consider necessities at this time.  Families are renting videos instead of going to the movies, or visiting the local library programs as a form of free entertainment.  After the visit you can take home books and read them for free.  It’s amazing how many opportunities there are for savings once we begin looking for them.  They’ve always been available to us but we were comfortable in our lifestyle and never investigated ways to save.

Many people are finding ways to save and still enjoy the vacation they’ve been waiting for all year.  My friend, Katherine, and her husband are working with a local travel agent to find a fun vacation that they will enjoy without spending too much money.  In an attempt to cut costs, Katherine and her husband have decided to shorten their vacation by two days.  This will eliminate two hotel stays and six meals, thereby affording them a substantial savings.  They are, of course, staying within the United States, and have chosen a less luxurious hotel than they might have stayed in before.  Their travel agent has found them several places of interest to visit and found them a hotel on the water so they can swim, rent a boat, or just enjoy walking the beach.  They are both looking forward to this holiday and believe they can do it within their budget.

Some people are choosing cruises for their vacations.  Although many are shortening the lengths of time they’ll be cruising, they are comfortable with the fact that this is an all-inclusive vacation and they will know upfront just what the costs will be.  If they are able to relax about the costs, they are sure to enjoy their vacations that much more.

Still others are planning to stay home.  They will visit local beaches and points of interest in their neighborhoods.  It’s funny how these are the places we take for granted and never visit.  I grew up in New York and never saw the Empire State Building or the Statue of Liberty until my Aunt Lina came to visit from Germany.  Suddenly we were on tour and I always wondered why it took this visit to motivate us to take the time to see our famous local attractions.

The most important part of any vacation is that you are able to relax, have fun, and enjoy the time spent away from home and work.  Even if you choose to stay at home, as long as you eliminate chores and just relax, you can still have a wonderful holiday.  We all work hard all year and have earned this time off.

The economy and gas prices have been the most talked about topics for many months now.  Everyday someone again mentions the price of gasoline and how much it has increased since last week, last month, and last year.  Meanwhile, the recession has everyone in a tailspin and worried about every move they make.  Some say we are not yet in a recession, but most believe that we have arrived.  One of the biggest questions is when will it reverse itself and how will we know when we’ve started back on the road to recovery.

One of the first signals that we are heading in the right direction will be when the stock market settles down.  Right now it is rising and falling on an almost daily basis and where it will go tomorrow is almost anyone’s guess.  Fewer fluctuations may well indicate that we are heading in the right direction.

The housing market will also tell us when things are beginning to look better overall.  When housing prices stop falling, or at least slow down considerably, we might be able to relax a little.  This would be a sign of change and, hopefully, will lead to more house sales, small rises in prices, and the return of some stability to the housing industry.

The creation of new jobs would also signal a reversal in the economy.  We are not there yet but we have been heading in the right direction, but ever so slowly.  There has been a slight increase in the number of positions available but demand is so high that it’s hard to appreciate this small improvement.  A much greater one will be necessary before we can relax and feel that this specific area is back to where we would all like to see it.

A combination of these particular areas showing improvement would definitely suggest that we are on the road to recovery.  This has not happened yet and no one knows when it may actually occur.  We are all working towards surviving in these times.  Businesses are tightening their belts and households are watching over their budgets very closely.  We are all praying that the end is near but several economists are still saying we have some rough times ahead yet.  If that is the case, we all better prepare ourselves for some turbulent times and just hope that the end will not be too long coming.

All indications have been that a rebound of the economy is expected in the second half of 2008.  No on has stated how much of a rebound, but I’m sure we’d all be pleased if we just started to head in the right direction.

The company sponsored 401K is rapidly replacing the old-fashioned company sponsored pension plan of yesterday.  Please note that the burden has shifted from employer to employee.  Companies actually paid 100% of an employee’s pension contributions and then rewarded them with this pension when they retired.  Those were the days!  People actually believed that this would continue and the majority of employers would continue to fund these accounts.  Things have changed considerably in the last decade.

The 401K is the new vehicle for saving for retirement.  Now it is the employee’s responsibility to fund the account and the company now contributes matching funds, usually at a rate of approximately 5% of the employee’s salary, assuming they contribute that amount.  Although this is “free” money, think about the fact that in the past employees were given an entire retirement fund as opposed to a maximum 5% match.

Since 401K’s are what is available today, it is important that all employees take advantage of them.  The money is saved tax free and the employer match is like a gift.  Anyone not taking advantage of this program is making a large mistake and not properly planning for their retirement.

Contributions should begin immediately when starting a new job.  Do not opt out regardless of your reasons.  Try to hang in there and contribute enough to qualify for the maximum match amount.

It is important that you select investments that fit your age and goals.  If you are a young person, stocks should weigh heavily in your portfolio.  If, however, you are near retirement age, you might want to cut your risk and reduce stock investments in favor of bonds and certificates of deposit.

All investors are encouraged to review their accounts regularly (at least annually) and to rebalance investments to meet your original goals.  This might mean moving funds out of stocks, if they have been profitable, and placing the money in a more secure investment.

If you should leave a company, the best thing to do is roll over your 401K to the new plan.  Many people are tempted to take the money and splurge on a few purchases but this is poor retirement planning.  Try to resist the urge to do this.

If your earnings meet specific government guidelines (under $53,000 for a married couple, $39,750 for a single person) you may be eligible for a federal tax cut depending on how much you have put into your retirement programs.  Discuss this with your tax adviser or contact the IRS website for additional information.

Although it is very tempting, try not to borrow from your 401K unless it is an absolute necessity.  You would be paying interest to yourself, but you are losing tax-deferred earnings on the amount of money borrowed.  Also, if you decide to leave your job, the loan must be immediately repaid or you will owe taxes and penalties on the loan amount.
401K debit cards are becoming very popular but present too much temptation to just enjoy these funds in the moment and forego the benefit of leaving them in your retirement account.  It is important that you make deposits to your account regularly and resist the urge to withdraw funds for everyday needs.

Gasoline prices are at an all time high and people are unsure as to just how expensive this product can become.  We have had oil crises in the past but somehow this one seems as though it will be more permanent.  We are all feeling the pinch at the pump and beginning to realize the far reaching effects this will have on prices of food, clothing, etc.  Everything is effected by this very large increase in the price of oil.  One way to fight back is to buy products made locally that do not have to be shipped.  Keep this in mind when purchasing foods, fresh fruits and produce.

Few of us realize the effect the price of oil has on other areas of our lives.  For example, the Postal Service spends an additional $8 million every time the price of gasoline rises by 1 cent.  This is hard to believe, but it is true.  Although they do purchase their gasoline at reduced rates, it still has a huge effect on their budget.  They operate the largest civilian fleet in the country and, therefore, are one of the biggest gas consumers.  It is true that they just received a rate increase up to 42 cents but they are not permitted to raise costs again for one year.  Meanwhile, the gas prices may continue to rise creating havoc on their budget.

Airlines are another industry struggling with the price of gasoline.  They have increased ticket costs and keep trying to remain competitive while attempting to cover their ever rising fuel costs.  One of the ways the airlines are trying to fight back is by charging customers additional baggage fees.  Many airlines have added fees for checking a second bag and several are even charging for the first bag checked.  These fees are changing on a daily basis so checking the charges with the airlines is the only way you will be current on the costs of baggage checking.  Some airlines are adding additional fees for curb-side check-ins and are charging additional fees of $25 to $50 for a piece of luggage weighing more than 50 pounds.  In the past, the limit was 70 pounds.  They are bringing in revenue anyway they can.

The increase in oil and gasoline prices is very far-reaching.  Almost every area of our lives results in additional costs because of this expense.  It is very difficult to plan for the future when you are living in an inflationary time that does not allow you the opportunity to even catch-up with expenses, let alone save money for something special.